Some insurance is required, and some is for your own peace of mind. Explore what things to consider when shopping for insurance and how to avoid bad deals.
Why do I need insurance?
Shopping for insurance can feel overwhelming but taking a little time to think will make the future buying process easier. Homeowners and renters’ insurance can protect your home and personal property against loss. While standard homeowners’ policies may cover a wide range of natural disasters, many don’t, and additional natural disaster insurance is needed.
Coverage and types of insurance
Coverage is a promise that you will be paid when a certain accident, or loss, happens. It is found in your insurance policy, which is the contract between you and the insurance company.
Different types of policies will cover different kinds of losses.
Car
Car insurance policies offer several types of coverage:
- Liability coverageprotects you if you are at fault for a collision.
- Uninsured motorist coveragepays for damages if an uninsured (or under-insured) driver hits your vehicle.
- Collision coveragepays to repair your vehicle if you were at fault for the damage.
- Comprehensive coveragepays for damage to your car due to theft, fire, or falling objects.
Life
Life insurance may cover the following:
- The funeral costs.
- Enough to continue paying bills and debts, like a mortgage.
- The college tuition for children.
- Enough to replace lost income.
Homeowners or Renters
Homeowners or renters’ insurance policies may cover the following:
- Damage to your home, garage, furniture, and other personal property due to a covered incident or theft.
- Living expenses for temporary housing while your home is being repaired.
- Bodily injury or property damage that you caused.
- Accidents that happen in and around your home.
- Limited coverage for valuables, like jewelry.
Natural Disasters
While standard homeowner policies cover a wide range of natural disasters, disasters such as floods, earthquakes, and infestations generally are not covered. Make sure your policies cover what you need.
What is a deductible and premium I can afford?
Understanding the costs associated with your insurance policy includes knowing what the premium and deductible costs are.
- Apremiumis the amount paid for an insurance policy, which is usually what you will pay monthly.
- Adeductibleis the amount you must pay before your insurance company will pay when you file a claim.
Usually, the higher your deductible, the less your premium (monthly payment) will be.
Questions to ask before buying insurance
You should have a good idea of what you want to be covered and your budget before you talk to an agent or buy online. Come up with questions and get answers.
Cost
- How much will this insurance cost me each month?
- Are there any extra fees?
- Do you offer any discounts?
Payment
- Can I pay in installments?
- What happens if I miss a payment?
- What will cause my payments to increase?
Coverage
- I’m in a flood zone. Does this policy cover floods?
- If I’m in a hit and run, what would you cover?
- We are expecting a child; would they be covered in this policy?
Time
- How long does this policy cover me?
- When does the policy coverage start?
- How long do I need this type of insurance?
Claim
- What is needed to file a claim?
- Can I file online?
- Who can file a claim if I am unable to?
Avoid bad deals and scams
If you have done your research, shopped around, and compared products, you should be in a good position to get the coverage that you need.
Customer service
- Avoid working with aggressive insurance agents, especially ones who pressure you to make decisions.
- Beware of companies that don’t let you talk to a live person.
- Make sure the insurance company is licensed by your state and has good consumer reviews.
Cost and coverage
- Check if you or your loved ones’ employer has insurance. It may be cheaper to share coverage instead of paying for a policy on your own.
- When comparing quotes, be skeptical of one with much lower premium costs (more than 15-20%) for very similar coverage.
- Go to multiple companies and compare a variety of quotes that suite your needs.
The information in this article was obtained from various sources not associated with Adirondack Bank. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. Adirondack Bank is not responsible for, and does not endorse or approve, either implicitly or explicitly, the information provided or the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. Adirondack Bank makes no guarantees of results from use of this information.
Article written by EVERFI
